The UK economy after Brexit: Working for all? Martin Wolf and Prof Mariana Mazzucato in conversation
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- เผยแพร่เมื่อ 4 มิ.ย. 2024
- Martin Wolf and Mariana Mazzucato in conversation at the Commission on Economic Justice conference, on Tuesday 14th of November 2017- 'The UK Economy After Brexit: Working for All?'. Join in the conversation using the #EconomicJustice hashtag, and to see the Commission's work click here ippr.org/cej
Very rare - two outstanding economists, different paradigm platforms, but very well elaborated arguments, both eloquent and professional. Excellent!
One thing we have to get out of our heads is the fearmongering about hyper-inflation. It's extremely rare with only about a dozen instances of it known through all of history and it also is the result of some combination of very extreme circumstances of government failure, economic collapse, social unrest and foreign sabotage.
Hyper-inflation often is proceeded by massive underinvestments which lead to that sociatal collapse cause that's what hyper-inflation really is. It's the system that gives value to the currency falling apart.
If someone says they are expecting hyper-inflation from government spending that means they are expecting that not only complete failure of the project but the coming apart of most of the economic system which is indeed a very extreme presumption.
@@MrMarinus18 A valid deepening of what I have written 5 years ago :-) After convid Mazzucato has shown her true colors and a lot has changed,
@@klubsvetnikov8290 And what are those 'true colors'?
I feel not much has changed about her other than leaders taking her more seriously. Covid made it very clear that the market has it's limitations and is utterly unsuited to deal with a crisis.
@@klubsvetnikov8290 But fearmongering about hyper-inflation is still rampant. Many people have it repeated to them over and over. Which makes them think it's something common that can easily happen rather than something very rare that only happens under exceptional circumstances.
@@klubsvetnikov8290 The post-Covid inflation was mostly due to the increased power corporations were able to gain during Covid and because of the very extreme lockdowns of China. China was and still is the world's factory and it refused to accept Covid as something to tolerate until finally they had no choice.
Mariana is just fascinating.
What a fantastic discussion.
I think we also have to make it clear what investings are good by themselves. With things like helping the poor it doesn't need to have a return later on, it's a positive thing to do just by itself. If it has positive effects later that's great but the lack of long term benefits should not be a reason to not do it. I think a big problem we still have is that we often have to find a way to financially justify helping people and I think that's wrong. The burden of proof should lie on those that want people to continue to suffer.
If you want to claim low taxes are worth the problems they cause you need extremely strong evidence cause the negatives are very clear.
Having re-watched this a year later, it's still worth listening to what Mazzucato and Wolf are saying. Probably even more so, after Trump's corporate tax cuts this year and AAPL stock having lost 25% of its value (not any longer a trillion dollar company, having lost 250 billion in value).
Their expectations were bang on: businesses did not use the extra profits by investing more but for mostly share buy-backs and increased dividends, Apple's lack of investment showing up in the 2018 line up of hardware, software and services has proven the company vulnerable despite a decade of world record profits. To mention just a few gems in their discussion deserving a shine up.
Looking forward to their next conversation.
There is also a very excessive focus on finance but while finance has it's place it is not a productive thing by itself so it's value can only go so far. What makes a good system is good policy choices on the allocation of real resources and how you organize actual people.
In today's hyper-capitalistic system it's easy to get lost in the financial talk but finance is only a potential facilitator of productivity, it's not a productive thing on it's own and can be taken away from you very quickly. You can't teleport a factory from one place to another and a factory that's functional has value. Finances in our modern day can be removed overnight and only has value backed by the state and institutions around it.
Building the majority of your economy around finance is quite a delicate position to be in cause you don't have much physical to back it up.
What's the wrist watch of Mr. Wolf? Does anyone know?
It's not that I didn't pay attention to the discussion. :) I did and I also noticed the watch. :D
Understand that
I love her Brain.
27:40
I actually agree with him there. The megacorp already have WAY too much power.
Why don't Wood use notes?
no se puede oir cuando dice que la deuda es privada y no publica. si los politicos son los que nos metieron en esto.
Nothing on combatting INEQUALITY. All about business.
Great point Suzanne, they and their sick salaries don't care about "normal" salaries.
Then again, what can we expect from people of their ilk...
That's because we live in a capitalist system. Combatting inequality doesn't just mean throwing money at the poor but understanding why they are poor. I do agree though they could have been more solution oriented like getting rid of corporate healthcare.
I like her.
District Thermal Energy in a MUSco model
Refreshing to hear a mature debate in contrast to the dumbed down conversation we see on main stream news and discussion panels such as Question Time. If the electorate is uninformed it renders our democracy ineffective as votes are wasted on slogans.
The whole thing about robots taking jobs can be very easily solved by raising wages so people have to work less. Mandatory work for 40 hours maybe just 25 hours.
And then we have our recent prime ministers ie Truss Johnson Cameron and their chancellors of exchequrs outcome were screwed
See the commissions work
Allowing venture capitalists to cash out with a capital gains tax advantage after two years incentivises precisely the high-risk/high-reward early seed capital investment that new ideas need. The fact that those early investors can punt their shares to somebody else is evidence that they've done something socially useful. They've signed "The Beatles" when the band might have broken up.
That is making assumptions though that what is good for them is good for society. A lot of Silicon valley entities like Uber and airBnB have been massive negatives for society and it's also undermining the very idea of democracy. If it is up to the individual choices of a handful of ultra-rich to decide who get's to have a chance and who doesn't that means democracy isn't really there anymore.
What you're saying is not false in itself just very short sighted and also bypasses the real issue. Many believe these venture capitalists should just not have that kind of power, that only a democratic government should. Many people are fundamentally opposed to the idea of oligarchy, they don't want to be at the whims of a venture capitalist aristocracy.
Hi
If companies engage in share buy backs they give the owners of those shares cash. Those individuals can buy goods - boosting demand - or invest as they see fit. If they distribute dividends the same is true. The buy back incurs tax costs, giving government money to spend. Dividends are taxed very heavily, again giving government money to spend or invest.
Craig Ross but they do this instead of investing and it is often quite short termist
@@TT-ce1vn Evidence? Most returns on shares have been dividends. Giving many CEOs extra money, whether retained earnings or through rights issues, is often like giving adolescent boys whisky and car keys.
Dividents are not taxed heavily, they should be but they aren't. Taxing dividents would indeed be a massive source of revenue.
@@craigross341 The problem is that most dividents go to the ultra wealthy who already have everything they want so dividents don't actually boost demand at all. Wealth redistribution to the bottom boosts demand because it's transferring wealth from those who aren't wanting to those who are.
It's a fundamental problem of capitalism as a system in how it relies on the purchasing power of the lower class for it's existence yet is systemically designed to undermine that thing.
Corporate saving you mean the rich are getting richer and the poor are getting poorer
not necessarily you have to look for the central bank thats going to be the place where the rich will be made in post brexit nazi uk
Charlie and Cam will right the Ship😅😅 and old Blair😅😅
Decided not to discuss Brexit hahaha, pure denial
You are missing the fact that the UK GDP does not rely on trade with the EU per say it is 80% dependant on the service sector that is what, and the EU has said there will never ever be a free deal on the service sector. Free trade on goods is only 18% of the UK GDP 55% with the EU and 45% with the ROTW.
Willing to swallow your words today?!
UK is going the worst way it can be and not even your main opposition has an answer to Brexit...
Starmer keeps going back like Trump to a "good deal", when he can't even define a good deal!
@@ABC-ABC1234 I think you confirmed my point, The UK is a shit show.
If someone needs no introduction, just say his name and shut up!
Just take some time to think about what Mazzucato says.
It displays the shocking ignorance in her analysis including her inability or unwillingness to follow a money trail and her failure to apply a reasonable sense of proportion of blame for the GFC in a situation where the scales are tipped purely in favor of government and against the private sector.
i.e. - 'Private debt ratio is back to what it was before the financial crisis.'
Then "the financial crisis was caused by private debt!.
This is an Absolute Shallow Badly Thought Out Conclusion That Fails the Test of Reality.
The reality is governments create debt when they expand the money supply and that forces government created debt onto the private sector through government spending the money they obtain from the reserve banks. The force part comes through taxation which is a one way street of the productive private sector funding government spending. There is NO Reciprocal Device that allows the private sector to fund itself through taxing government.
Yet she ignores this reality and places the burden of the GFC upon the private sector.
cos private banks had no fault for there for their solvency issues.
@@Jay_Johnson Could you elaborate on what you said?
@@ThomasVWorm I am well aware that private banks create new fiat credit money when they lend. The reserve banks also create the same fiat credit money and there is absolutely no difference in that money from money private banks create. The difference is in who is burdened to pay it out when the Treasury securities or private bank loans that allowed it's creation actually mature.
The funding of the crisis by government that you describe was through money creation by the reserve banks. That was debt creation at the same time simply because there is no way fiat credit money can be created without creating debt at the same time. Fiat credit money is a financial asset and all financial assets are worthless unless backed by an obligation of a separate entity to pay them out or supply goods and services to back them .
Government bonds are also financial assets and are not "safe" because they are denominated in the currency of their own creator and the fall in purchasing power of the currency will mean a fall in the purchasing power of the bonds when they are converted into currency.
Yes, after the crisis the process of bail outs initially turned private debt to public debt but the story over an extended time is all public debt eventually becomes private debt because there is nobody else to pay off the treasury securities that allows its creation and it eventually matures.
"There is NO Reciprocal Device that allows the private sector to fund itself through taxing government."
Yes there is: It's called subsidies.
The cause of the GFC wasn't the amount of private debt but the kind of debt it was and the house of cards of speculation build on top of it. If you actually listen to how they are talking about the GFC they are never saying it was excessive debt, they say it was bad debt and how banks failed to realize this. This is why demands for regulations were and are still everywhere because it was a very vivid demonstration of how private banks can not be trusted to make good judgements for the rest of society when there is money to be made on speculation.
It's that same lack of nuance I see throughout with you. You often talk about "government spending" without any specification of what that spending is used for. There seems to be this assumption that the societal benefits of government projects will always be zero.
You, like many neo-liberals also completely ignore the massive inequality in our capitalist system. A "loss" means nothing without context of how much and for who. For the elite financial losses can be barely noticable while for the lowest in society they can be fatal. Of course the rich have a lot of power so you can't entirely throw them under the bus but treating them like some victims because of their loss is stretching it.
One thing with you that I can't figure out is where you believe money comes from. It's something you seem to never answer. MMT has an answer for it in that money comes from the government and is backed by their force of arms to tax the people and enforce their laws. The sovereignty the government has over a territory and the monopoly of violence they have within it creates power which is expressed in currency.
Currency allows property owners to harness that violence of the state each other too. If you default on your morgage the bank won't kick you out, the police will. It's the state that enforces it through it's monopoly on violence.
Exactly why you are arguing that the private sector is exempt from blame for their actions is a mystery to me. Even people on the right agree that it was the reckless speculation of bad debt that was the cause of it. You are quite remarkable in how you feel you can even deflect blame for the GFC from the private sector to the government. What the reality is, is that the government has become nothing but the enabler of private capital. Using it's monopoly on violence to enforce their property claims and giving out massive subsidies and also rigging the economic system in their favor while not holding them accountable much at all.
Racist public policy
Sorry just cannot listen to that womans nerver ending voice.
Sexist...
Hurri
She's giving incredibly detailed answers as you'd expect from an economist. If you don't like her analysis than state a counterclaim otherwise you just seem churlish.
Actually it is rather pleasant to listen to her